Musicrypt was incorporated in July 1999. The goal of the founders was to build an organization that would be a leader in the emerging digital music distribution market. To achieve this they aimed to develop an innovative technology solution and assemble a team rich in music industry experience.

The company researched various existing methods of distributing media via the internet in a secure manner. It saw that passwords alone were not secure enough because users tended to share passwords to access entertainment media. IP address lockdown technologies provided greater security, but it too was not user-friendly and more difficult to implement with the growth of broadband and dynamic IP addressing. The advent of machine lockdown technologies (using the user's computer/hard-drive serial numbers as keys) highlighted users' dissatisfaction with having media tied to one computer.

From this research of what became known as the digital rights management industry, the company developed its unique approach of combining biometrics with encryption and web-based distribution. This would provide a solution that would link media access rights directly to the designated individual, be able to verify such individual from any computer and thereby enable secure and portable, and user-friendly, access. The company called this model Biometric Rights Management.

On February 28, 2003 Musicrypt closed its Initial Public Offering and on Wednesday March 5, 2003 the company's common shares were listed for trading on the TSX Venture Exchange (TSX-V) under the symbol MCT. The successful completion of the IPO in March 2003 provided the funding required to launch the first commercial version of Musicrypt's Digital Media Distribution System (DMDS) in 2003.

Demonstrations of DMDS in 2003 received overwhelmingly positive response from record companies, broadcasters and music industry consultants. After seeing the functionality of DMDS for delivering new releases to radio, record companies requested that DMDS be adapted to make secure internal transfers within their companies.

In the first quarter of 2003 Musicrypt announced successful trials with EMI Music Canada and Standard Broadcasting's Mix 99.9 radio station, and in April 2003 the expansion of testing to Universal Music Canada. During the first half of 2003 DMDS was also installed at the offices of selected broadcasting consultants, Canadian Music Network (Canada's leading music industry publication) and also at Broadcast Data System's (BDS) Canadian office and its head office in the United States.

On Tuesday May 20, 2003 the company made music history when, for the first time, a major record company completed the delivery of music files securely from recording studio to record label to radio stations across Canada via the Internet using Musicrypt's Digital Media Distribution System (DMDS). EMI Music Canada serviced the new single "Generation Genocide" by Canadian recording artist Jersey to Canadian rock radio stations in Victoria, Vancouver, Calgary, Edmonton, Saskatoon, Regina, Winnipeg, London, Hamilton, St. Catharines, Toronto, Kingston, Ottawa, Montreal, Quebec City, Fredericton and Halifax using DMDS.

Universal Music Canada released the long awaited single "Eat You Alive" by multi-platinum recording artist Limp Bizkit to Rock Radio across Canada on August 7, 2003 via the internet using Musicrypt's Digital Media Distribution System (DMDS).

In August 2003 EMI utilized DMDS to distribute new releases by major international artists Nickelback, A Perfect Circle, and Jane's Addiction. On September 1, 2003 Vancouver's Nettwerk Records used DMDS as the lead delivery vehicle to Canadian radio for "Fallen", the long awaited new single by Grammy Award Winning Artist Sarah McLachlan.

In September 2003 EMI Music Canada became the first paying customer for DMDS. EMI has installed DMDS with 85 staff members and has been using the system to securely send internal music files throughout the company since April 2003.

In November 2003 BMG CANADA Inc. used DMDS as the lead delivery vehicle to service Canadian radio with "Star of All the Planets", the new single by Canadian Idol Ryan Malcolm.

Rogers Media and Standard Broadcasting, two of Canada's largest radio chains, announced in November 2003 and January 2004 respectively that their radio stations would use DMDS exclusively to receive digital files from record labels.

Further significant market progress was made in March 2004 as Universal Music Canada announced that it would use DMDS exclusively to send digital music files to radio stations via the internet.

In May 2004 Musicrypt announced that it has entered into an agreement with The Canadian Independent Record Production Association (CIRPA) to provide Canada's rapidly growing independent music sector access to its DMDS. Independent record companies account for approximately 15 - 20% of music sales in North America.

Also in May 2004 Musicrypt announced that both Warner Music Canada and BMG Canada had become its newest major label customers. Warner and BMG are using DMDS as their digital delivery service for music releases to radio and internally.

In June 2004 Musicrypt extended its international presence as it entered into a strategic partnership with Sonic Arts Ltd. of London, England to market and support its DMDS in the United Kingdom and Ireland. Sonic Arts is a London based postproduction facility servicing the five major record companies and is one of the pioneers in the protection of physical musical media in the pre-release stage.

On August 9, 2004 Musicrypt announced that it has reached agreement with Universal Music Canada on commercial terms for use of DMDS. With the addition of Universal as a customer, DMDS became the secure digital delivery service of choice for more than 80% of the Canadian music industry.

Shania Twain's new single "Party for Two" was delivered on September 3 via DMDS and Canadian Music Network reported it was the "Most Added" record by radio stations in Canada the following week. On September 23, 2004 Universal Music Canada released the highly anticipated new single "Vertigo" by Irish superstars U2, solely via DMDS to over 1,000 recipients. BDS (Broadcast Data Systems) News reported the following on the success of that release:

"IN BDS NEWS: U2's Vertigo becomes the first ever song to debut at #1 on the Rock Audience chart. The amazing thing about this feat is the song was only on the air for 4 1/2 days of the chart week. Before the creation of the Audience chart, only one other song, the Rolling Stones' Anybody Seen My Baby, had ever entered any Rock chart at #1. Vertigo also enters the All Format Audience chart at #3, the best debut ever on that chart. It has debuts strongly at the other formats, entering at #24 on the Hot AC chart and #14 on the CHR. Vertigo is the ninth #1 song in the BDS era for U2, the most by any artist at the Rock format."

These two superstar releases are evidence that the record labels trust DMDS to securely deliver their most important releases.

Also in September 2004, Musicrypt distributed the debut single "Awake In A Dream" from the new Canadian Idol winner, Kalan Porter, for BMG Canada, Inc. to Canadian radio the instant the winner was chosen on west coast television at 10PM PST (1 AM ET). Warren Copnick, Director, National Promotion, BMG Canada, Inc. said, "Moments after finding out that Kalan Porter was chosen the winner, Musicrypt's DMDS allowed us the flexibility to deliver the single immediately and securely to all of our staff, and in broadcast quality to radio programmers, consultants and industry contacts. Before the advent of this remarkable Canadian developed technology, this would not have been possible".

The rapid success of these releases illustrates the promotional advantages of DMDS - all radio stations can receive new music quickly, simultaneously and can immediately play it on air. This provides the record labels with a faster time to market for their new product releases. The delays (and costs) associated with manufacturing, printing, packaging, and delivering promotional CD's are eliminated.

In October 2004 Musicrypt added V2 Records Canada to its list of customers. V2 Records is the first of the "Major Independent Labels" to sign on for DMDS. V2 Records is an independent label launched in 1997 by entrepreneur Sir Richard Branson, the founder of the very successful Virgin label. V2's artists include White Stripes, Moby, Underworld, Stereophonics, The Datsuns, Mercury Rev, Grandaddy, Katy Rose, The Crystal Method and Josh Ritter. Musicrypt began testing with V2 Records in London England in November.

During October Musicrypt announced that Corus Entertainment, Canada's largest radio operator, would use DMDS exclusively to receive digital music files. The total reach for Corus as of the Spring 2004 BBM is 7,901,892 listeners. This means that the three largest radio chains in Canada are using DMDS exclusively to receive digital music files. Canadian broadcast chains that collectively represent 98% of all chart monitored radio stations use DMDS, including Corus Entertainment, Standard Radio and Rogers Media Broadcasting on an exclusive basis.

In November 2004 Musicrypt joined forces with Warner Music Canada to deliver key Live Aid tracks to radio. Musicrypt donated its DMDS service and its technical staff to extract the audio tracks from the DVD and deliver these efficiently and securely to radio stations all across Canada.

In December 2004 Musicrypt announced an exclusive agreement with Billboard Radio Monitor, the premier radio industry publication and online destination for timely news, charts and analysis, and sister company to Billboard. This partnership provides Billboard Radio Monitor with the exclusive right to market Musicrypt's DMDS in the United States and targets the implementation of DMDS to record labels, radio stations throughout the U.S. monitored by Nielsen BDS (Broadcast Data Systems), and remaining non-monitored new music oriented radio stations throughout the U.S. Billboard is a subsidiary of VNU Inc., the world's largest media information group.

Musicrypt officially launched its U.S. marketing campaign with Billboard at the Digital Music Forum in New York on March 2, 2005. At that conference Musicrypt announced that DMDS had received the endorsement of Clear Channel Radio, the largest radio broadcaster in North America, with over 1,200 radio stations in the United States. Jeff Littlejohn, Executive Vice President, Distribution Development for Clear Channel Radio said, "We recognize that Music Labels need an efficient, but secure way to distribute music to our programmers. Musicrypt's DMDS interfaces easily with our internal systems, so our stations can be assured of receiving the highest quality of audio as soon as it becomes available."